Visakhapatnam: With the AP government planning to go for open auction of sand reaches, the construction sector is hopeful that the prices of sand would drop by more than half in the next couple of months.

The rate of sand per unit during the last 10 days has touched Rs 7000 per unit with each unit measuring 3 cubic metres, said builders. With the introduction of the new sand policy, as cleared by the state cabinet in Vijayawada on Wednesday, builders are now hoping that the rates will fall to around Rs 2000 to Rs 2500 per unit in the next couple of months once the open auctions are completed in the state.

Confirming that sand prices have now touched Rs 7000 per unit in the last couple of weeks, Confederation of Real Estate Developers Association of India (Credai) Vizag zone chairman K Ramakrishna Rao told TOI, "Once the open auction is conducted, we are expecting the sand prices to reach Rs 2000-2500 per unit. Even though the state government launched the policy with the good intention of benefiting self-help groups, the execution at the ground level was affecting builders as well as individuals constructing houses."

"We are expecting the auction process to be held in January and the new policy in place by around February. The advantage of the open auction is that it will be available around the clock and be able to meet the demands of the city," he added.

Concurring, Credai secretary B Srinivasa Rao said, "The customers will also benefit due to the drop in sand prices." He said, "The cost of sand and cement combined together have added around Rs 200 per sft in the building costs. If the sand prices drop to Rs 2000 per unit, then it will directly benefit the consumers as they can expect a drop of around Rs 100 per sft in prices of flats in the city."

Mentioning that Robosand, which is artificial in nature, itself is available at around Rs 2000 per unit, he said, "Natural sand has to be lower as it doesn't need any power or labour cost involved in the manufacturing process." With open auction of sand reaches in place, builders said that the competitors with access to different sand reaches will be keen on increasing business and ensuring that a higher volume of sand is available in the market. According to sources, more than 200 apartment projects are in various stages of construction in the city.